Read this article to understand how to calculate the expiration date of Bitcoin options?

The returns of Bitcoin options are high, but the risks are also high. Investors usually need to have high professional knowledge, especially understanding the option expiration date. The expiration date of Bitcoin options is an important concept in options trading and is Refers to the date when the validity period of an option contract ends. Usually, upon the expiration date, the contract will automatically end and investors will no longer have the right to exercise it. And how to calculate the expiration date of Bitcoin options? It helps to conduct better options trading. According to the current data analysis, the algorithm is determined by the contract provisions, which is usually determined when purchasing the option contract. The editor below will tell you in detail.

How to calculate the expiration date of Bitcoin options?

The expiration date of Bitcoin options is usually determined by the contract provisions, which is usually determined when you purchase the options contract. The expiration date is the date when the validity period of the option contract ends. After expiration, the option contract will no longer be valid.

Usually, the expiration date is agreed upon by the buyer and seller of the option contract at the time of transaction, and is usually a specific date in the future, such as one month, three months or more. The expiration date is an important part of an options contract, as it determines how long the option is valid.

For example, the Bitcoin options launched by BitOffer have 7 time periods, namely: 7 days, 1 day, 12 hours, 4 hours, 1 hour, 5 minutes, and 2 minutes. Users need to select the corresponding time periods when placing orders. cycle. If the current price of Bitcoin is US$7,500, and after analysis and judgment, you believe that Bitcoin will most likely fall in the next hour, so you buy a 1-hour put option for 10 USDT.

Bitcoin fell sharply in the next hour, from US$7,500 to US$7,000. After the 1-hour option expiration system settles, your income is 7500-7000=500 (USD), which is 50 times higher than the cost. If Bitcoin rises in the next hour, you will lose the 10 USDT option principal invested. This is the benefit of options with "unlimited returns and limited risks".

Is the expiration of Bitcoin options good or bad?

Whether the Bitcoin option expiration is a good thing or a bad thing mainly depends on the current trading price of Bitcoin. If the limit price is lower than the Bitcoin option price, then it is a good thing. If the current price in the currency circle is higher than the Bitcoin option price price, then it is now negative, but it depends on a number of factors, including the relationship between Bitcoin's current trading price and option prices, market supply and demand, investors' strategies and operations, and the difference between the price of the option and the price of the underlying asset .

If the current price of Bitcoin is lower than the option price, the exercise of the option may increase the market demand for Bitcoin, thus having a positive impact on the price. Option delivery provides a price discovery mechanism for the market, helping to eliminate information asymmetry and more accurately reflect supply and demand and market sentiment.

Option delivery increases market liquidity, reduces transaction costs and spreads, makes the market easier to enter and exit, and has greater execution capabilities. Providing investors with more investment strategy choices can help reduce risks, increase returns, and meet different investment goals. When the delivery price favors the buyer, the buyer can buy Bitcoin at a lower price and earn higher profits when the price rises.

If the current price of Bitcoin is higher than the option price, the exercise of the option may reduce the market demand for Bitcoin and have a negative impact on the price. Investors may adjust or close positions before option expiration to avoid or reduce potential losses, which may result in increased market volatility and uncertainty.

If the delivery price is unfavorable to the buyer, the buyer may choose not to exercise the option, thereby reducing market demand and putting pressure on the price of Bitcoin. If the delivery price is unfavorable to the seller, the seller may face losses and may generate selling pressure, causing the price to fall.

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